In October I had the good fortune to spend some time in Sulimaniyah, at the American University of Iraq’s Institute for International and Regional Studies, where I worked on a research project with a group of student assistants. Our objective was to document the effects of the KRG budget crisis on the Kurdish economy.

The situation in Kurdistan turned out to be even worse than I had imagined. We found that consumer spending has collapsed, property prices have crashed, occupancy rates at four and five star hotels have plummeted, and work on many projects has come to a virtual standstill.

Capacity utilization at cement plants is falling, car dealerships are struggling, income at banks and insurance companies is down sharply, and sales of big-ticket electronics items are slumping. Businesses that only two years ago were making record profits are now fighting for survival.

Most of the business people we interviewed characterized this year as the worst that their companies had ever experienced. “Only during the civil war was the situation worse than it is now,” one told us—referring to the mid-1990’s conflict between the two main Kurdish political parties. “We had a very pessimistic business plan but weren’t able to achieve half of it,” said another. “Things are getting worse every week,” said a third.

This is truly a great recession by any definition of the term.

Interested readers can find more details in our report , which includes sections on oil and gas, construction, consumer demand, property development, hotels, and private investment and concludes with a discussion of possible directions for government policy.